Indonesian leader reshuffles Cabinet amid rising food prices

·2 min read

JAKARTA, Indonesia (AP) — Indonesian President Joko Widodo announced a Cabinet reshuffle on Wednesday, replacing key economic ministers amid a national cooking oil shortage and rising food prices.

Widodo selected Zulkifli Hasan, the chairman of a political party that joined the ruling coalition last year, as Indonesia’s new trade minister, replacing Muhammad Lutfi, who had been criticized for his handling of the cooking oil situation. Hasan held ministerial positions in previous governments and vowed to quickly tackle the shortage, making cooking oil available “anywhere at an affordable price,” he told a news conference after his inauguration.

A cooking oil crisis that was initially triggered by the Russia-Ukraine war shook up both domestic Indonesian politics and the global supply chain after the government in April banned all exports of crude palm oil, a key ingredient in cooking oils, amid a series of student protests against skyrocketing food prices.

Indonesia resumed exports of crude palm oil a month later.

Indonesia and Malaysia are the world’s largest exporters of palm oil, accounting for 85% of global production.

Pressure on the global supply of cooking oil has increased due to the war in Ukraine, which accounts for nearly half of the world’s sunflower oil. Russia accounts for another 25%.

Palm oil prices went up 200% or higher after Indonesia banned the export of cooking oil and its raw materials to reduce local shortages and hold down rising prices.

Widodo picked Indonesia’s former military chief Hadi Tjahjanto to replace Agrarian and Spatial Planning Minister Sofyan Djalil, and also appointed three new vice ministers.

Widodo is hugely popular in the archipelago nation of more than 270 million people, with a 68.4% public satisfaction rating, according to pollster Charta Politika. A majority of Indonesians also supported Widodo's decision to reshuffle his Cabinet.

Southeast Asia’s largest economy served as a key exporter of coal, palm oil and minerals amid a global shortage in commodities after Russia’s invasion of Ukraine. Coal exports increased to record levels in March after a brief ban on its shipments early this year to secure domestic supplies.

The nation is on track to hit its full-year economic growth target of 4.8%-5.5% after recording a 5.01% pace in the first quarter. COVID-19 cases in Indonesia have been steadily declining.

Niniek Karmini, The Associated Press

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